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Journal of the Academy of Marketing Science

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01-02-2011

The role of institutional and reputational factors in the voluntary adoption of corporate social responsibility reporting standards

Authors: Ralitza Nikolaeva, Marta Bicho

Published in: Journal of the Academy of Marketing Science | Issue 1/2011

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Abstract

Firms are uncertain about the value of corporate social responsibility (CSR) reporting, which may involve significant costs. What makes them embark on the initiative? This is the first study to explore the voluntary adoption by companies of the world’s most widespread framework of CSR reporting—the Global Reporting Initiative (GRI). The GRI case is impressive because it achieved its status in mere 10 years. The inquiry focuses on the role of the firm’s institutional environment and identity communicators as drivers of the adoption of the GRI principles as a reputation management tool. The authors use a duration model to test hypotheses with data on 600 top global companies. The findings indicate that competitive and media pressures together with a company’s CSR media visibility and CSR publicity efforts are important determinants of GRI adoption. Also, as the GRI framework becomes more institutionalized, companies pick up more information from prior adopters.

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Unilever has two subsidiaries, which are independently listed—one in the Netherlands and another one in the UK, which were included in the sample.

We counted companies as GRI adopters only if the mother company joined the GRI reports. If a foreign subsidiary reported, but the headquarters did not, then we did not count the company as an adopter.

Since the survey publishes only the top 100 brands, we cannot use actual scores or rankings as we do not have information on all of the firms in our sample.

We looked in Business Week’s and Fortune’s annual reports on the top global companies as well as in the Compustat database.

Because of the nature of the model we estimate described in the next section, the data was transformed into firm-year observations resulting in a total sample of 5,560 observations.

While Models 3 and 4 have lower BIC and AIC values, they are based on a different likelihood of the null model (due to differences in the sample). Consequently, the comparison criteria are valid only between Models 1 and 2, and Models 3 and 4.

The authors state: “Marketing’s current problems are rooted in organizational inertia, misaligned incentive systems, poorly designed value propositions, and outmoded ways of thinking about markets and customers. The culture of marketing, especially in consumer marketing, has become too corrupted and disfigured by short-term thinking and the loss of focus on the fundamental human values that require that companies and customers treat each other as allies and partners in value creation rather than as adversaries and potential victims” (Sheth and Sisodia 2006, p. 5). To this we add not only the company’s relationship with customers, but with all its constituencies.

Mitchell (2001) reports on a survey showing that only 18% of executives from other business functions consider marketing executives to be results oriented.

Another limitation related to the current sample is the inability to make any generalizations to medium and small enterprises. This has been noted as a deficiency to the spread of GRI as the adopters are mostly large corporations.

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Title: The role of institutional and reputational factors in the voluntary adoption of corporate social responsibility reporting standards
Authors: Ralitza Nikolaeva
Marta Bicho
Publication date: 01-02-2011
Publisher: Springer US
Published in: Journal of the Academy of Marketing Science / Issue 1/2011
Print ISSN: 0092-0703
Electronic ISSN: 1552-7824
DOI: https://doi.org/10.1007/s11747-010-0214-5

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